A surprise rally in a major factory gauge has traders reconsidering their risks, while crypto watchers debate whether Bitcoin will ride another wave of gains or remain in a drawdown.
The ISM Manufacturing PMI rose into expansion territory in January, and this single data point triggered a flurry of similar views from market strategists and crypto analysts.
Signs of change in the ISM manufacturing industry
According to the Institute for Supply Management, the PMI in January was 52.6. This number crosses the line that separates contraction from growth.
For investors closely monitoring signals, such a move could mean money starts moving back into assets deemed riskier.
“Past breakouts in 2013, 2016, and 2020 were important catalysts for Bitcoin’s massive bull run,” said Joe Barnett, vice president of Bitcoin strategy at Strive.
The Fed will also notice. Strong manufacturing performance changes the debate on inflation and interest rate policy. Traders are pricing in the possibility of policy tightening if growth looks strong.
At the same time, some economists say manufacturing is just one piece of the puzzle. Services, employment and consumer demand are also important. According to the report, the index reading is the highest since August 2022, which is noteworthy in itself.
One of the longest ISM Manufacturing PMI contractions in US history ended this morning, rising 4.7 points from December to 52.6.
Previous breakouts in 2013, 2016, and 2020 served as important catalysts for Bitcoin's massive bull run.
This ends a period of 26 consecutive months…
— Joe Barnett, Msba (@IicaPital) February 2, 2026
Bitcoin price fluctuations and market mood
Bitcoin price is volatile. After peaking at over $125,000 at the end of last year, it fell, then rebounded to around $78,000. The decline was reportedly influenced by large-scale liquidation events and a series of macro shocks that drove investors toward safe-haven assets.
Some buyers are looking at the decline as an entry point. Others remain on the sidelines. The correlation with stock technology stocks is strong. This means that Bitcoin has acted more as a risk asset than digital gold in recent months.
Source: ISM
Some traders argue that increases in PMI measurements often precede “risk-on” periods in which speculative bets return. However, this link is not complete. Bitcoin's movements are shaped by liquidity flows, ETF flows, geopolitical flare-ups, and crypto-specific events. The market is being pushed from multiple directions simultaneously.
Who should we trust with our predictions?
Voices within the organization are divided. Based on reports from various companies, forecasts range from cautious to very optimistic. Some companies are predicting a post-crash rally that could see prices significantly above current levels by the end of the year.
Another research organization warns that further retracements could precede a sustained bull market. One large institutional investor refused to commit to a number at all, saying the environment was too turbulent to predict with confidence.
This kind of range tells a clear story of uncertainty rules. Analysts who link Bitcoin to macro cycles are gaining a following, while those who treat Bitcoin as an independent asset advocate a different strategy.
why is this important
Short-term traders will closely monitor economic developments and liquidity data. Long-term holders will weigh the role of Bitcoin compared to gold and stocks. According to the report, market structure – who's buying, who's selling, and how ETFs see flows – is likely to be as important as any single economic indicator.
While a rise in ISM may be the start of a healthier risk tone for global markets, it does not in itself guarantee a steady rise for Bitcoin. Risk is back on the table, so to speak, and the path forward will depend on how policymakers, big investors and retail traders react in the coming weeks.
Featured image from unsplash, chart from TradingView
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